As text messaging grows more popular and moves beyond the teen set, agencies are increasingly adding wireless components to campaigns—for clients ranging from Allstate to Purina to British Airways—and some agencies are even setting up dedicated units.
In a sign that agencies are taking the nascent medium seriously, Omnicom Group last week outbid WPP Group to buy ipsh!, a 26-person San Francisco agency that has created over 400 wireless campaigns for clients such as McDonald's and Kraft.
Other agencies are building on their own wireless capabilities. Publicis Groupe's Starcom MediaVest has set up a wireless arm called SMG Digits. Omnicom-owned Organic is hiring mobile specialists ahead of an expected series of client campaigns in 2006.
Mobile marketing is just emerging as a medium, particularly in the U.S. market, which is considerably less advanced than mobile-obsessed Europe and Asia. Yet mobile marketing is expected to take off in the next four years; research firm eMarketer predicts that spending could triple from 2005 to 2009, reaching $760 million.
Until recently, the U.S. market has seen slow adoption of data services such as text messaging. That's now changing. According to a survey by the Mobile Media Monitor, 37 percent of U.S. mobile users now use text messaging, including 62 percent of 18- to 34-year-olds.
As a first step, agencies have used text messaging to extend existing promotions. Today, Allstate kicks off an ESPN ad campaign that offers consumers the ability to get the college football Bowl Championship Series rankings sent to their phones when they are released every Tuesday morning. Thanks to increased adoption of text messaging, Courtney Acuff, associate director and wireless specialist at SMG Digits, said she expects a big uptick in participation, compared to Allstate BCS wireless pushes in the previous two years.
However, because mobile marketing is a purely opt-in medium, agency executives said clients may need to pare back their reach expectations. In general, a well-performing wireless campaign garners 3 percent response rates, according to Enpocket president Mike Baker. "If you're doing the program right, you're enabling self-selected hand-raisers to engage in a dialogue," Acuff said.
Entertainment companies, which already have ready-made content, like music ringtones, have been the most active wireless marketers, but other brands are pushing their own content. Publicis' Arc Worldwide included a mobile component when it relaunched Purina's Web site in June; it offered pet owners barking and meowing ringtones, and weekly text message pet-training tips. "The future we see for mobile marketing is it has to be based on the consumers' terms and their ongoing interests," said Pat Isom, vp and account director at Arc.
Despite the enthusiasm for mobile marketing, some executives warn that too many wireless campaigns are divorced from the overall marketing push. Enpocket's Baker said consumers are not made aware of wireless promotions. In many cases, wireless campaigns exist as "one-offs and have no value exchange," said Tom Ajello, vp and cd at Omnicom's interactive shop Agency.com. Future campaigns will have combinations of emerging interactive media, such as viral and mobile, and multimedia applications, he said. "The right way to use mobile is as a piece of the overall experience, not as a standalone."